What is Social Security Contribution in Oman?

Oman, alike the other Gulf Cooperation Council (GCC) member countries is known for tax free income for employees; therefore attracting expatriates to invest their work life here. Hence while generating the payslips through Lenvica HRMS, there is no deduction under income tax as such in Oman for both Nationals and Expatriates. However, the social security contribution is one applicable deduction in the payroll of Omani nationals alone.

What is Social Security Contribution?

The Public Authority for Social Insurance (PASI) administers the social security law in Oman. It is mandatory for all employers employing Oman nationals to subscribe with PASI and remit the monthly dues of social security contribution. Employers must pay contributions of every month within 15 days of the subsequent month. Social Security contribution is split into three components – Employee Social Security (7%), Employer Social Security (10.5%) and Insurance against occupational injuries and diseases (1%).

Employer and employee contributions are calculated on the aggregate of basic salary and allowances paid in cash and in-kind. The gross salary to be included in the calculation is limited to a monthly gross salary amount of 3,000 Omani rials (OMR). Employers will need to assign a monetary value to the allowances paid in kind.

Employee Social Security (EE SS)

Employees who are Omani nationals are subject to social security contributions, levied at 18.5% of the employee’s gross salary. Only 7% of this contribution is payable by the employee. Employees who are foreign nationals are not liable to remit social security unless otherwise specially instructed by the ministry.

Employer Social Security (ER SS) & Insurance

Companies are required to pay 11.5% of the employee’s gross salary as social security contributions including a 1% payment for work related injuries or diseases. The withholding obligation lies with the employer. The social security system of Oman is under a unified system of insurance protection coverage for Gulf Cooperation Council (GCC) members that cover workers in all GCC countries.